Manufacturing: what can be done to save the manufacturing sector in the UK

Once a mainstay of the British economy, the manufacturing sector has been facing huge challenges in recent times. Trade unions are now warning that it could soon die out altogether unless the government develops a clear strategy to stem the tide of job losses and company closures.

Employers, trade unions and politicians all seem to agree that something must be done to help improve the situation, which is clearly reaching crisis point.

Figures show that more than a million manufacturing jobs have been lost since 1997 and the decline is so serious that if the current rate continues all British jobs in the sector will be gone by 2029.

Despite the decline, economists argue that the sector is still vital to the economy with statistics from Barclays bank highlighting a combined turnover of more than £500bn.

Furthermore, 14.5% of the economy is based on manufacturing and 12% of working people are employed in the sector. Yet the haemorrhaging of jobs continues.

Speakers at the recent TUC Unite for Manufacturing conference called on government to urgently develop a more coherent policy on the future of the sector and provide greater protection for workers against mass redundancies.

Labour chancellor Gordon Brown, who is widely expected to take over as prime minister next year, is the latest figure to get involved, pledging to do more to strengthen the sector.

He promised a package of measures designed to drive up skills levels in the sector, increased government investment, and an expansion of the flagship Manufacturing Advisory Scheme.

“Manufacturing will always be vital to the success of the British economy. We know that skills are a priority and will do more to support capital investment in manufacturing,” he said.

Derek Simpson, general secretary of Amicus and chair of the TUC manufacturing task force, believes the current malaise has the potential to change the UK economy and society as a whole.

“There is lots of talk about skills training, but where are the jobs that these people will do? There needs to be a clear strategy for manufacturing that includes job creation policies,” he said.

One of the problems facing the UK is cost, with many overseas markets such as China and India able to produce goods far cheaper than the UK. Simpson argues that workers in the UK are far more vulnerable than those elsewhere in Europe, so when global companies need to make cuts they look to Britain first.

However, the EEF deputy director of employment policy David Yeandle thinks that any additional legislation will damage the sector even further by strangling outside investment.

“Increased protectionism would be a grave mistake. The flexible labour market and low barriers have actually led to greater inward investment. We need to raise the skills levels generally and encourage more young people to start a career in manufacturing,” he said.

“I do get a bit concerned that the unions always seem to look at the negative, which only discourages people further. It’s no good us competing for low skill, low pay jobs. We need to build skills, technology and expertise.”

But only time will tell what the future holds for manufacturing and whether Brown delivers on his promises to support the sector next year.